Thursday, July 17, 2008

Financials and Techs, the key to market recovery

The market is showing some signs of life obviously. Financials and Techs are what must work to have a real recovery. Today's late afternoon tech reports are mixed, with old tech doing fine(IBM) and new tech(GOOG) slipping. New tech is not really tech in the old sense, it's market making in eyeballs, in product delivery. Financials after WFC's and JPM's steadfast performance are hit by Merrill's(MER)report, but this should not be news. Merrill has been a management disaster as Stan O'Neal really had no clue what was happening and it will take time for John Thain to clean it up. This should be the last hurrah for the O'Neal mess, or else Thain will begin to be tarnished. No Goldman man would allow that.

What is becoming clear is that differentiated management is now important. An economy that carried everyone is gone. Good management at companies is visible, bad management is obvious, even within the same industries. This is not always the case.

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